great announcement - my view

Hey All

Well VIL had a great announcement today and initially things looked really good, with the SP going from 4.5 to 5.1 within 20 minutes. However short term traders have sold down their positions and taken profit on the back of the news that it will take another 4 weeks until the commercial viability of the well is known. As the drilling rig will be demobilized and a workover rig will be mobilised to undertake production testing.

So those traders with short attention spans and novice investors who expected a 300% return in a day have sold out and should return in the coming weeks. This is no surprise given the sheer number of traders. Looking at the volume last week leading up to Friday, where the general sentiment was that results were due any day, the market traded 599 Million VIL shares. Pushing the price from 3.9c to 4.5c, 559M VIL shares almost = 100% of the listed equity of VIL!!!

Todays closing price should form a good base for the coming weeks. Anticipation of results will add some volatility to the share price but in my books all the boxes have been ticked for a successful well, evidence of this can be seen in the announcement. And Ive summarized below:


- Drilling has encountered over 300 feet of quality hydrocarbon bearing formation.

- Electric line logging has identified hydrocarbon occurrences throughout high permeability and porosity sands.

- An additional 80 acres of adjacent land has been secured.

- Casing of the entire well completed in preparation for an extensive testing campaign.

- Comments from the chairman of VIL saying We are still to fully understand the commercial viability of the well, however at this stage; this appears to be the best outcome Verus shareholders could have wished for

- Land access agreements required for production pipeline laying, and agreements for connection to existing nearby production facilities and distribution network, thereby enabling gas sales, are almost complete. The tie in point to this major trunk line is approximately 1.6 miles away.

(You dont do all of this if there is nothing down there, they must be positive that this is commercially viable)


So hold on for the ride boys and lets see where this takes us! I even bought some more today, my price target is 7c - 9c over the next 4 weeks.